Nokia announces a new partnership with Microsoft and their stock dips by 15%! Why?!

Nokia announces a new partnership with Microsoft regarding their mobile OS and announces a deep corporate restructuring, and the market welcomes that with an almost 15% dip in NOK stock! 

I just think that from an investor point of view, this kind of announcement looks like a statement of defeat on Nokia's part, as they had 1 amazing operating system 10 years ago (Symbian) which they failed to leverage in front of the Android and iOS competition and are dropping it now in the trashcan, they also started a new project backed by Intel (MeeGo) 2 or 3 years ago and it seems that they are giving it away to the Open-Source community with not much support like in the case of Android. So that might look like another potentially failed project or at least a last attempt to raise by two failures (Symbian and Windows Mobile OS have both failed to counter the rise of Google's Android and Apple's iOS) in the same manner Microsoft tried to buy Yahoo 2 years ago (cf. a quick analysis http://bit.ly/microsoft-yahoo-deal). 

On the second hand, still in an investor's point of view, if Nokia starts "dating" Microsoft, in the short term there is no upside for them, it will take at least 6months to 1 year to clear the current Nokia products' pipeline and start from fresh. Also the kind of restructuring is not a «done» deal till it is done, and carries a lot of uncertainty regarding the outcome. And finally to continue on the outcome issue, the new Windows 7 Mobile has not been in the market for long enough to see a directional trend whether it will catch Android and iOS train or if it will stay on the side like Symbian, Windows Mobile 5, or BlackBerry OS so far for that matter.

But, and there is a big but: Microsoft has deep pockets and can still spare a couple of mistakes before getting it straight, which Nokia couldn't handle anymore. Then, Microsoft Windows 7 Mobile has had a great peer reviews so far, and finally, Microsoft did the right thing by ditching all the old (and so 2000ish) Windows Mobile OS and starting from scratch in a truly definite and innovative way. It was a tough choice (always tough to do radical change and ditch the current user base, just like what Windows XP did to Windows 98), but it was a long-time overdue thing. 

I think that the timing for both of them is a little bit late (should have done it a year ago, as Android registered an 880% increase of adoption in the last year alone), but at least it finally sets the stage for new paradigm regarding Mobile OS. So far, and in the wake of 2000's Smartphone, the business model for Mobile OS was the like of Desktop OS which was to license it for each device and get royalties, or to keep it for its own devices. Apple is still doing the latter, but Android brought a complete game-changing business model, which is to give it away for free, to open-source AND to support it (the latter being the Achilles' heel of the Linux-like OS for computers). Google is making money through ads served when browsing and perhaps a cut when buying apps. 

So for Windows 7 Mobile, giving money to Nokia (which is still a huge device manufacturer) to adopt their software will benefit both companies. On the one hand Microsoft will get an instant spike in their OS distribution and adoption which will keep them relevant among the major Smartphone OS. For Nokia, it finally gives them an edge on the new Smartphone market. They are VERY strong (better than the iPhone by far) on the hardware part, but to stay head-to-head with the Samsung and HTC of this world they need to have a strong OS, which they will with this more robust Microsoft solution. Also that will let them focus on their core business, which is not software development obviously. 

Bottom line, I think on the long run this is the best strategic move they could make. In my analysis of Nokia before, I said they should focus on their core business and embrace Android. Now it's with Windows. Fair enough. The only draw-back I see with that is that it might delay further longer the adoption of a Smartphone-like OS for their "dumb-phones" that they sell by the truck-load in the developing countries, because now they might depend on Windows development pipeline for that. I still stand by my word, and do think they should deploy a scaled-down Android-like OS for their cheap phones, and not wait until the competition does it. Still, if I had money, I'd put some on NOK today at 4PM, and more in the (most probably) upcoming market pull-back.

If Microsoft was running Iphone's AppStore instead of Apple, how would you and the antitrust bodies react?

In reply to MG Siegler @parislemon regarding the comparison between the AppStore's action against Adobe and the development of railroads:

It's not fair to compare the railroad system of the US with Japan's one: Japan has a very narrow island, so most traffic goes north/south. The US and Canada are huge country: they are large, long, AND interconnected. That's why both countries need standards, while Japan does not. It's better to compare US & Canada with Europe where the railroad standards were different (I know for sure between Spain and France at least), and it has only been a decade that they are really bringing one standard, and in the same time we are seeing super high speed trains between Madrid and Paris for example. So, I don't think that you have to link the standardization to lack of innovation. 

The lack of innovation comes from the lack of choice. One standard is fine, but a platform has to let the developer chose if he/she wants the standard coding language/compiler or go another way. By forcing this up on the developers, Apple is imposing an artificial comparative advantage of its phone over the others which I would call the "lock-in advantage".

Think about what Microsoft could have done with it's "platform" advantage on Windows Media Player if the Antitrust laws were not hanging on the neck of Bill Gates, imagine Microsoft sayging that Windows would not support the Ipod as it was a duplicate features on Windows because Microsoft has its Zune, same thing for Itunes as Microsoft had Windows Media Player, same thing for Mozilla Firefox, Safari, Chrome etc... as there was already Internet Explorer. Apple is doing the same, it's using it's platform advantage to impose a standard and dismiss competition.

I usually don't like government involvement but, as I pointed it out in this status on Twitter, if it was Microsoft who were acting like Apple we would get the Antitrust squad breaking Redmont's doors: just imagine MacOS' hardware lock-in (instalable only on Mac hardware), Itunes monopoly (what 70% of music online goes through it right?), AppStore monopoly (no third party store on Iphone!!!), Iphone OS language monopoly, Iphone OS compilation monopoly. If you think about it, it's like what Rockfeller did in the early oil-rush: selling the tools to dig, selling the platform to transport it, but what he did not is own the land, and that's what Apple is doing. Think about the "serf" in the middle-age: they didf not own the land (the platform), they did not own the tools (the language), they could not go anywhere else (the lock-in or the exit barriers), they only owned what they harvested (the software) and they had to share it with the master (30% goes to Apple, right?). 

Obviously the comparison is a little far-fetched, but I understand what Adobe is saying, while I also understand that Adobe has a quasi-monopoly on the web regarding Flash, it's only the format, there are litteraly dozens of tools that let you produce Flash software/games/videos etc. And there are hundreds of stores online where to buy flash. Apple is doing the opposit, and by doing this it increases the pressure on the developer while giving him little ways of getting out as the platform became so ubiquious among smartphones and high end phones. I know that's not what Apple is telling people, Apple talks about the quality of its platform and the quality of Iphone's software written in native language. But if people want to write in a language which renders poorly on their platform, let it be and let consumer chose to fly away and go  to a competitor who programs better directly in the native language, no? It shouldn't even be a debate! Isn't it what we call capitalism? Let the best developer win the customers? If customers don't like a program they will switch to the competitors. Point in case, people left Internet Explorer beside the massive and dominant market share until 2005. For that matter, I think that Apple talk are kind of B.S as when it comes to an end, it's mainly the bottom-line that counts and by locking the users and programmers in, and building big walls of "exit barriers" for software portability it helps imposing development for the main platform only. And the more time the government wait to react the more innovation will suffer among the community, and so will you as a consumer! 

I feel that I'm always ranting these days, but what Apple and Facebook are doing regarding different aspects of "users disrespect" goes beyond my understanding (not the financial understanding obviously). And the way people and the government reacts to that is concerning. The government should start questioning some practices Apple has and this is getting urgent: AppStore being the sole platform for selling software on Iphone, Iphone language and compiler being the sole for programming on Iphone, and the ViP ad network that gives insiders tracking information while in the same time forbidding competitors from tracking the users in their TOS are among the most proeminent example in my belief. 

Did I miss any? Am I just wrong? 

Step by step: Get your privacy back on Facebook - Updated with the latest April 28th 2010 change with "Instant Personalization" and "Friends, Tags and Connections" menu

Update 29/04/2010: Facebook has just changed AGAIN the privacy settings. I'm not talking about the Instant Personalization option which was rolled in April 21st, but a slight change in the privacy menu http://bit.ly/facebookprivacymenu and specifically with the new sub-menu Friends Tags and connections. I will try to change later the screenshots to reflect that change.

I guess you have been on Facebook for a while now, and you've seen the change in Facebook's privacy settings in February and December 2009. Now with the release of the OpenGraph things are changing again.

I am making this post specifically because of 2 persons who are not the least tech-savvy, but who ran into trouble by letting there previous (pre-2008) privacy settings stay the same for the last 3 years. After sending them the following screenshot, I thought it may apply to other people as it's probably clearer than my previous post.

Hopefully, in the 6 following steps, you'll get the Facebook YOU want it to be and not Zuckerberg & Co's "open" community (open, as in show your whole life publicly no matter your previous privacy settings).  So here you go!

1. First today's "magical and revolutionary product", the  "Instant personalization" "feature":
Instant personalization allows other websites to access your profile. If you want to cancel that function here is what you should do, go to http://bit.ly/instantpersonalization and uncheck the box.

2. Applications & Websites privacy option:
Indeed, if you read what's written at the bottom of that page it says:

Please keep in mind that if you opt out, your friends may still share public Facebook information about you to personalize their experience on these partner sites unless you block the application.

So go to this page http://bit.ly/applicationswebsites and uncheck all the boxes about the informations that you don't want other websites to know about you, because if a friend of you goes to this website, it can store the following information about you.

3. The general privacy settings:
Now the funny part that changed in December 2009, if you haven't changed your privacy settings since then, you probably have them "reset" to the state bellow, that's what happenned to my brother and sudenly he had his whole profile open to the world to see.

When you work long hours in a highly demanding job, you don't have the time to tweak your profile every now and then, and that's something that Facebook does not (want to) understand. So here are the changes that should be made in order to get a little bit of your privacy back http://bit.ly/privacypersonal :

 And you should tweak the settings for photos and videos that people tag of you as follow in order for you not to have anyone tagging that photo, you know, THE one that you don't want your ex, your boss or even your mom to see: Update: it's now in the following 6. section that you can change this settings

4. The search settings:
Now that you have done that you should also think about who do you want to be able to find you on facebook and on Google (or other search engine). Do you really want the HR department of that shiny new firm that you applied to be able to check your "background"? Do you want to be found by random people on Facebook or other colleagues and then to have to exaplain why you did not want to add them? You cannot run all the time on the famous sentence "oh, I don't check my Facebook very often, I forgot to accept your friend request" or another one of the same flavor, so go to http://bit.ly/searchprivacy :
By default Facebook wants everyone to find you and enjoy "socializing" with you:

But if you don't want to end-up like this poor girl (I think) who lost her job because of trashing her job and forgotting that her boss was able to look at that (if your profile is not set properly as previously in the general privacy settings, all your status updates are visible by ANYONE on the whole web!)...

It's the same thing if people can find you on Facebook or by Googling you, so personaly I did the following:

5. Your friends list:
You should also change how your friend list is displayed to your friends/friend of friends/Everyone as follow: Update: it's now in the following 6. section that you can change this settings

6. Update on April 29th: The new Friends, Tags and Connections Privacy sub-menu:
Here is the latest in Facebook "get back to default i.e Everyone" privacy settings... I'm really thinking about switching my Master's studies to get a degree in a "Master's in Facebook & Social Media"! ;)

So here is the new default settings that I just saw this morning in the new Friends, Tags and Connections Facebook settings that controls the tags you get and the new "like" button on partners websites http://bit.ly/friendstags:

 You better change them if you don't want your aunt, your mom or whoever check that you love drinking from the Keg, or that your future employer see that you changed jobs 10 times in the last 2 years, or even your guys friends know that you clicked on like for the movie "the notebook" (I don't have anything against it, just an example ;)

Here you go! I'm not sure that I covered everything, I just hope that you'll take advantage of this tweaks and that you'll follow this posts for future updates regarding Facebook's privacy! Actually I really think I should do a "Master's in Facebook" (perhaps from University of Phoenix! ;) or create a dedicated website for this crazy ever-changing privacy settings, layouts, Terms Of Services etc...

Please just take the time to share this page to make sure people know more about how your seemingly innocent activites on Facebook can have a huge impact on your life (professional & personal) and that you have the tools to make sure you "control" to a certain extent what goes on your behalf on Facebook and the web in general...

Goog luck!

PS: feel free to tell me if I forgot anything, Facebook's privacy is getting harder and harder to crawl through....

PPS: sorry for the mess, the post was created on April 21st, then posted and updated on the 29th.